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Sunday, November 30, 2008

AIG, Banks, etc..Bailout of Banks and Finance Companies all getting the handout from the Government. Now Auto companies are asking the same thing. What Gives? How does this impact you and your wallet? Well for starters, people are mad about this handouts, but this aint the first time. The Government ALL READY gives out welfare for Businesses, and Individuals. These entitlements are about 60%-70% of the existing Federal Budget. We keep thinking that the Government has an unlimited supply of money, it owns NOTHING.

Now how does this impact your wallet? It reduces the value of the dollar in your savings. This is why you need to be an investor. As long as money is being spent by the Federal Government (unconstitutionally by the way), you dollars will go down in value. This causes a general rise in prices..aka inflation. When investing, you must beat Taxation and Inflation. These to twins in crime reduce your ability to invest. So when the President says,"I will invest into infrastructure or whatever FREE BE; stop and think. How is he investing into this project? Where is the money coming from? Is it coming from Private investors? The answer the Owns Nothing, it gets its money from the its citizens viz a viz taxation.

Why not allow its citizens to invest the money themselves? Why cant we learn about investing and do it ourselves? It has already been proven that most money invested on our own will out perform Social Security? We should be able to invest in our own hard earned cash? Why cant we as citizens make their own Changes? Every dollar the Government spends, we lose the ability to be able to spend for ourselves or invest for our families.

My hope is that President Obama and Congress will allow us citizens to invest into our own infrastructure. My guess is that President and Congress will NOT allow this. Absolute Power corrupts absolutely. I dont see President Obama or Congress allowing the Citizens the choice to make our own "Change".

So with these bailouts, why not allow give the citizens and small business owners a bailout? Allow us to keep more of out money by reducing taxes and getting out of our wallets. With this Tax Bailout, we can save and invest for the future. Businesses AND individuals should not be rewarded for bad choices. Even if those choices where FORCED by the Iron hand of the Federal Government.

Saturday, November 8, 2008

Congrats to our President Elect Mr. Barack Obama. His history making performance on Tuesday will be remembered for many for years. The first US President that is an African-American is an embodiment of the American Dream and our great Nation. Martin, Fredrick, Malcolm, Booker T are beaming with pride with this accomplishment.Now that he will be our new President, what does this mean for your wallet? Hope and Change is great, but the bottom line is your financial future and your family's future; regardless who is President. My major concern is about the Tax Cuts from 2001 and 2003. This topic was the centerpiece of this year's campaign. These Tax Cuts will expire in 2011. So lets explore how these Tax Cuts could impact your wallet in the world of Taxes and Qualified Retirement Savings Plans.

Taxes

While Taxes are a necessary evil, we must pay them in order to keep our Country's Government strong. Citizens are currently receiving the lowest Income Tax liability since..well a long time. The Tax Cuts from 2001-2003 allowed a large majority of Americans to receive a cut in their income taxes liability. In some cases, folks received stimulus checks BACK from the government. These tax cuts benefited mainly middle class Americans since the "Rich" pay the majority of the Federal Income taxes. Here are a list of the key highlights of what WILL happen when these Tax Cuts are reversed(thanks to the Heritage Foundation and the IRS for this data):

Tax rates will rise substantially in each tax bracket, some by 450 basis points;

Low-income taxpayers will see the 10-percent tax bracket disappear, and they will have to pay taxes at the 15-percent rate;

Married taxpayers will see the marriage penalty return;

Taxpayers with children will lose 50 percent of their child tax credits;

Taxes on dividends will increase beginning on January 1, 2009;

Taxes on capital gains will increase, also beginning on January 1, 2009; andFederal death taxes will come back to life in 2011, after fading down to nothing in 2010.

It seems to me that most Americans don't mind paying taxes, but just their "Fair" share. If presented the choice to pay MORE in taxes; compared to LESS in taxes; the answer is obvious.

Qualified Retirement Plans

With these Tax Cuts, Americans are currently allowed to have increased contributions to the their Qualified Retirement plans. This is a plus because currently Americans have a negative (-4%) savings rate. When the Tax Cuts expire in 2011; 401(k) plans, IRAs, etc will go back to their original annual contribution limits. For example, the current contribution limit to an IRA is $5k -$6k as compared to $3k in 2002. Why is this important? With the cost of living rising aka inflation, Baby Boomers will NEED MORE money at retirement. Financial Experts say most people need a MINIMUM of $1,000,000 in your retirement accounts to survive at retirement. If these tax cuts are reversed,this means that Americans will have less to place in their retirement plans. With less money contributed to these plans, the chances of having more money receiving Tax Free Compounding decreases. The net result: less money for Retirement.

Also, most of the wealth is in Home Equity and 401(k) plans. Upon withdrawal of the money in the 401(k) plans, these funds will be taxed as ordinary income. If these tax cuts are reversed, many Americans will lose a large portion of their savings to Taxation and Inflation(created mainly by the Federal Reserve and Government Spending). The real question for these account holders is this; how long will it take to run out of money for retirement? The answer to this question could be a scary thought.

Conclusion

In summary, these tax cuts impact our personal finances. All of us pay taxes, this fallacious talk about taking from one class and giving to the other class is a form of thievery. As per Article I of the Constitution, it is Congress' responsibility to levy taxes on its citizens. The problem is not paying for taxes, the problem is we are paying taxes for items not Legally listed in the US Constitution. We have expanded the size of this problem and Government from each administration regardless of political party. The more Government spends and taxes, it takes money from every American's pocket regardless of Economic class. This translates into a widening gap between Rich and poor; and the elimination of the middle class.

With the reversal of these tax cuts, the Middle Class and poor will need to have other solutions in order to save for retirement and build wealth. I hope that President Obama does NOT Change these benefits from these Tax Cuts. I Hope that Congress does not CHANGE the benefits from these Tax Cuts. Otherwise, it will be extremely difficult for many Baby Boomers to retire with financial dignity. In the meantime, go to www.triplecompounding.com for your FREE financial Reports for the secrets of winning for Retirement REGARDLESS what Congress and the President decide to do.

Thursday, October 23, 2008

The largest expense in your working life time that will be incurred is Taxes. It is greater than HealthCare, Gas, Oil, College Education or anything else. The other "Tax" is Inflation. These two expenses will eat up your retirement savings. You must overcome these two monsters during your working years? How do you beat them? The funds must grow in an enviorment that will BEAT both moochers. The enviorment must have a interest rate that is greater than inflation, it must grow where the growth on your money is TAX FREE. 401(k) plans can offer this type of benefit, but what happens when you retire? The money is taken out, and BAM...you are taxed. If you are paying attention to this current Election cycle, the definition of Rich keeps being redefined. Why save all your life to find out that you are RICH, and to have Uncle Sam take up to 50% annually from your retirement savings?? That does not sound fair? These 401(k) accounts can change based on Congress, since they the ability to leavy taxes on the citizens. Congress through their extreme demogougary, will keep re defining who is rich. If that happens at your retirement, what options do you have? Currently, the possibility of having the redefinition of "rich" may happen. Many Baby Boomers will LOSE their HARD EARNED RETIREMENT SAVINGS to the IRS.INFLATIONThis is the secret tax that nobody really understands how it reduces your retirement funds. The prices of things over time will increase in value. This means the money saved in the account will lose value because it will take MORE money to buy things in the future. This is VERY insidious, and there is a deeper meaning why this takes place. With the combination between Taxes and Inflation, the Baby Boomers have pleanty to worry about. There are options available! Call me at 888-853-5293 for options that can provide TAX FREE Retirement, and your money will not loose its value regardless of the perfomance of the stock market!!!

Saturday, July 19, 2008

Now that I have your attention with the flaws of "Buy Term and Invest the Difference"(in cased you missed it, read the first part of the article..) let's explore WHY I dislike a person who believe this strategy is the best for people 100% of the time. Each of us are unique. We have our own thumb print, eye color, body size, family, gene pool, etc. What would make people like Suze Orman, PFS Agents, or Dave Ramsey think that Term insurance or this type of strategy is good 100% of the time? It is fallacious to think this. This does NOT mean that Buy Term and invest the difference is bad. I think it is a good starting point. My problem is the messages of this strategy are so DOGMATICLY against any other type of financial plan. Here is the point, flexibility is needed when constructing a financial plan. Since every one's situation is different, their must be products implemented that have flexibility. For example, a two income household earning more that $180k per year can really take full advantage of most of the qualified plans. They would have to look at alternative products, Annuities, Universal Life, Whole Life, etc to accumulate wealth for their family. On the other end, a family earning $70 per year could take advantage of the same products also. It just depends on their goals. So when shopping around for a financial product to fix ALL your needs, stop and think. Financial Products are a part of the OVER ALL financial plan. The REAL product that is needed is the financial plan, not just ad naseaum slogans. If you are confused and need a REAL financial plan, call me today for your customize plan at 888-853-5293 or get FREE info at www.triplecompounding.com Do it now!

Monday, July 14, 2008

While Buy Term invest the difference is great, but it has several flaws. What happens if you outlive the term? What is the cost of insurance after the term period? Can the advisor put in writing the future gains of a mutual fund? If an Advisor says he can GUARANTEE future returns on a mutual fund, then run away! What happens if I want to add MORE money to my IRA on an annual basis? How much do I need to have at retirement? When will I run out of retirement money? Will my 401k/IRA contributions be enough to get me to the goal? How about my estate tax, how much will go to the IRS? Cash value insurance can answer these questions with Authority in spades. Buy Term Invest the difference crusaders can't answer these questions with any authority because they only look at on small aspect of the huge financial planning picture: the cost of insurance. They miss the lost opportunity cost of Triple compounding, Tax-Free Income, Estate Taxes, Increased Premium rates AFTER the Term period on Term Insurance, and the instability and inherent risk of Investing in Mutual Funds. They get you focused on the Insurance Agent's "GREED" instead of focusing on the greed of the IRS, Brokerage Houses, and the people who promote these simpleton concepts. Buy Term invest the difference crusade was excellent in the 70s, but it is over. There are TOO many excellent products and concepts to locked into just this ONE financial plan. Buy Term invest the difference is a EXCELLENT starting point, but I would not want to finish there.

Sunday, July 13, 2008

If you are like most Americans, you are scratching your head and asking, why are the Gas Prices so HIGH? Well, that is a very good question, but here is the REAL question you should be asking: Why am I being enslaved to the IRS? Why am I throwing good money out the window each time I drive my car? Why am I making Uncle Sam Richer?Instead of complaining about gas prices, start using the IRS to your advantage. Start your own business! There are plenty of business opportunities to suit a wide variety of interests, talents and skill levels. If you are in business to make a profit, and it is not a hobby; there are plenty of business related expenses to write off...like Gas! If you like to take lemons and turn them into lemonade, why not take inventory of your current talents, and start a part-time home based business. Start reading different books on home based businesses, they are plenty at your local library. If you have any thoughts on starting one up, call us up at 888-853-5293, or go to our web site at www.triplecompounding.com to register for FREE reports!

Wednesday, May 28, 2008

This is an overly use phrase in the financial services arena; "(PRODUCT X) is a rip off". Many famous financial planners; Dave Ramsey, Suze Orman, etc just to name a few use this phrase. Typically, this phrase is used to scare people into submission while selling their product, books, seminars, DVDs, CDs, etc. This verbiage creates a"us versus them" dynamic. Them is usually the "evil" and "Greedy" Insurance Companies, Banks or Brokerage Firms. This verbiage is typical when creating a movement or cult like following. I understand the game, and it stinks quite honestly. When TV personalities use this verbiage, it is usually used to set up themselves as the expert. Financial Products are NOT created out of "Greed" of the companies. There is plenty of market research and regulatory red tape to satisfy BEFORE the product goes to market. These "experts" never seem to tell the complete story when verbally ripping up a particular product. I believe that we as professionals in this industry have the Fiduciary responsibility to tell people the ENTIRE story, not just scare tactics.The financial products act as parts of the overall Financial Plan. If your objective is financial freedom, what difference does it make..just as long as the product performs as promised, right? There are various products that have pros and cons. For example, the strategy buy term invest the difference may be an excellent strategy for someone with limited or no liquid assets, while purchasing a Variable Universal life product may work also. It all depends on the objective of the client. My point is be flexible when hearing about different products in the marketplace. Just like cars, financial companies are always seeking improvements to existing offerings.So in the future, when you hear phrases like" only buy term and invest the difference" or "Cash Value is the best", "don't buy reverse mortgages" or "Annuities are rip-offs" be smart enough to do research with a competent advisor who understands all sorts of products for your unique Financial Plan.

Saturday, May 3, 2008

Did you know that you can virtually eliminate current state taxes that average (9%) and Federal (31%) income tax from your investments? That’s right. You can. And there’s an added benefit. At the same time you can double your wealth. Sounds too good to be true, doesn’t it? But that’s exactly what millions of Americans are doing today. How? Through an investment called a tax-deferred annuity. An annuity is a fantastic investment and a “must” strategy if you’re in a higher tax bracket or live in a high-tax state. It’s the best way I’ve found for you to keep more of your own money.You see, a fixed annuity allows your money to compound your interest tax-free. You don’t pay a single dime in taxes until you withdraw your money. Because you pay no current tax, you’ve got at least 40% more (what you save in taxes) to reinvest. To invest, so your money multiples faster. But if you really want to get a gain on your money, you’ll want to check out the index annuities. You get the upside of the Stock Market and no down side. Many of this safe Tax Deferred Savings plans have been averaging 8% for the last half dozen years.

Saturday, March 22, 2008

A Roth IRA account can help you to manage your income taxes in a variety of ways. This article explores a number of these tax-savings benefits.

First, qualified distributions from a Roth IRA are paid free of federal income taxes. Reducing your federal income taxes in retirement can potentially free up a greater portion of your retirement income for your living expenses, as well as other discretionary spending such as travel or leisure activities. This preferred tax treatment also extends to the distributions that are paid to your beneficiaries as well.

Additionally, a Roth IRA comes with no minimum distribution requirements. Unlike a traditional IRA, a Roth IRA can give you greater control over withdrawals from your retirement savings. You can direct exactly when you want to take money out of a Roth IRA and how much you want to withdraw. In fact, you may never have to take a distribution from a Roth IRA, if you have alternate sources for your retirement income needs.

A Roth IRA can also lower the taxes you pay on your Social Security benefits. Because money you take out of a Roth IRA does not count as income when you figure the taxable portion of your Social Security income. However, withdrawals from a traditional IRA count as income, and can potentially increase the portion of your Social Security benefits that are subject to federal income taxes.

There are a few additional things to consider. To receive to future tax-free treatment on distributions, you must have reached the age of 59½. Additionally, you are required to satisfy a 5-year holding period requirement that is imposed upon each contribution of assets to the Roth account. Even though the withdrawals for Roth accounts can come out tax-free to you at retirement (and to your beneficiaries), your contributions to the account are paid with after-tax money. Granted qualified withdrawals come out free of federal income taxes, state income taxes may apply depending upon the tax rules of the state where you reside.

As previously mentioned, you are required to pay federal income taxes on amounts converted from a traditional IRA to a Roth account. However, the federal tax rules do allow you to spread out your conversion over multiple years through partial account conversions. This can help you to spread out your income taxes on the conversion over multiple years.

The Roth IRA can be an effective wealth-building tool and can also be a tax-efficient strategy for retirees. For more information on Roth IRA’s and how they work please call our office.FREE REPORTS!

Saturday, March 1, 2008

Millions of taxpayers make mistakes on their tax returns each year even if they use professional tax preparers. The reasons range from sloppiness or ignorance about changes in tax laws to excessive caution or zeal when taking deductions. Mistakes could increase your tax bill, delay the processing of your return and/or draw the scrutiny of the IRS. What you need to know now to avoid mistakes when you do your taxes this year…

MISTAKE: Neglecting to follow new charity deduction rules. Recent changes in the law require more extensive documentation for charitable contributions.All monetary contributions now must be documented by a bank record, such as a canceled check, or by a written acknowledgement from the charity. Merely noting the contribution in a log or a check register is no longer acceptable.Donations of any kind of $250 or more must be documented by an acknowledgement letter from the charity.If you donate a used car worth more than $500 to charity, your allowable deduction depends on how the vehicle is used for charity. If it is sold, you can deduct only the amount that the car was sold for as reported to you in writing by the charity. If the charity retains and uses the vehicle, generally you can deduct its fair market value.If you donate noncash property worth more than $5,000 – other than stock—there are new restrictions and requirements on the appraiser you use to estimate the value. For further details of documentation rules that apply to donations you have made, see IRS Publication 526, charitable contributions. www.irs.govMISTAKE: Sloppiness. The most common mistakes are inadvertent ones, such as math errors, reporting incorrect Social Security numbers, failing to attach required W-2s and schedules, and forgetting to sign returns. While these may seem minor, they can delay the processing of your return and arrival of any refund.Britaney B. Saks, CPA PricewaterhouseCoopers LLP

Thursday, February 14, 2008

All the financial "experts" are telling us to contribute to our 401(k) plans. This is good advice. I will tell you that they are WRONG to tell us to depend ONLY on 401(k) plans or qualified plans. They are ticking time bombs; and they are savings bonds for the IRS. You are probably saying, " Savings Bonds for the IRS, what gives?"

The IRS has all kinds of qualified plans. These plans have three major benefits:

Tax Deductible Contribution

Tax Deferred Accumulation

Tax Free Distribution

You can only get two of the three. Which one would you choose? Most people choose the first two because the "experts" tell us that we will be in a lower tax bracket at retirement? Really?? How do they know? My guess is that taxes will be higher due to the entitlement programs and other Government Spending. If you choose the first two, you will pay MORE in Taxes at retirement. Why work, save and invest for retirement, to see you run out of money in 9 years? Why would you run out of money at retirement? There is only ONE financial product that can guarantee a lifetime of income throughout retirement. In my opinion, a Fixed Annuity is an excellent choice. It provides a lifetime of income that the principle is guaranteed by the insurance company. You principle will not be subject to the stock market ups and downs. Next, it provides a free pass through on probate. No worries about the estate tax man. Does the 401(k) plan meet this test? No, your principle will be subject to the estate tax man. The problems with Fixed Annuities(Immediate or Deferred) is the bad press by the Radio "Experts". Their ignorance has created some controversy surrounding these products, but yet they recommend the most risky investment products for retirement. I think it is risker to run out of money at retirement, AND pay estate taxes on your hard earned money that has already been taxed once! Annuities are not for EVERY situation, but for long term retirement income, you can't beat an annuity!